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2 Important Disclosures BB&T Capital Markets is a division of BB&T Securities, LLC. Member FINRA/SIPC. BB&T Securities, LLC, is a wholly-owned, nonbank subsidiary of BB&T Corporation. Securities and insurance products or annuities sold, offered or recommended are not a deposit, not FDIC insured, not guaranteed by a bank, not insured by any federal government agency and may lose value. The information contained herein, while not guaranteed by BB&T Capital Markets, has been obtained from sources which we believe to be reliable and accurate. This material is not to be considered an offer or solicitation regarding the sale of any security. Discussions of past performance do not imply a guarantee of future results. Comments regarding tax implications are informational only. BB&T Securities and its representatives do not provide tax or legal advice. You should consult your individual tax or legal professional before taking any action that may have tax or legal consequences. The opinions expressed are solely those of John B. Jung, Jr. and do not represent the opinions of BB&T Capital Markets or BB&T Securities. This material is presented for general information only and is not intended to provide specific advice or recommendations for any individual. Investment products offered through BB&T Investment Services, Inc. are: NOT A DEPOSIT NOT FDIC INSURED NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY MAY GO DOWN IN VALUE NOT GUARANTEED BY A BANK Member FINRA, Member SIPC.

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U.S. Competitive Advantages Government Stability Geography Arable Land Raw Materials Energy Costs Transportation Infrastructure Education – everybody wants to go to college in the U.S. 11

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U.S. Competitive Advantages Government Stability Geography Arable Land Raw Materials Energy Costs Transportation Infrastructure Education Work Ethic / Productivity – Puritan or not, we have it (and it is quantifiable) 12

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13 U. S. Global Competitiveness United States Labor Productivity is up almost 50% in the last twenty years – driven by technology and process improvement The United States Worker is the most productive worker in the world U.S. Labor Productivity Source: U.S. Department of Labor; Bureau of Labor Statistics

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15 Key Measures of the US Economy S&P 500 and S&P Corporate Earnings (EPS) Earnings growth in the last decade has outpaced growth in the S&P 500 index; resulting in a lower price to earnings ratio. Much of the growth in earnings is tied to the growth in the global economy. Stock market performance is a big driver of consumer confidence. Source: FactSet, data as of January 1, 2015

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16 Consumer confidence has trended up since the all-time low in February 2009 and consumer spending continues to recover. Key Measures of the US Economy Source: Bureau of Economic Analysis 16 U.S. Consumer Confidence/Spending

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17 Although the U.S. has lost nearly 8 million factory jobs (40% of total) since manufacturing employment peaked in mid-1979, the U.S. remains the No. 1 manufacturing country in the world, doubling output since 1979 and currently out- producing No. 2 China by 25% Since 2010 the United States has added 650,000+ manufacturing jobs Key Measures of the US Economy Source: US Federal Reserve - Industrial Production and Capacity Utilization Report Industrial Production 17 Industrial Production – measure of physical output in factories, mines and utilities

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20 The effects of the Great Recession 20 Percentage Change in Economic Indicators Following Recession Average, 3 Years After The Start of Recession (1) Current Cycle (7 years from the end of 2007) What is normal?Is this the new normal? 2009 - 2014 were the five largest deficits in modern history, totaling $6.3 trillion (8% of GDP on average); the above draws into question the value of stimulus spending. (1)Covers eight recession cycles going back to 1950 (does not include the truncated 1980 recession) Source: Haver Analytics, Gluskin Sheff, U.S. Census, U.S. Bureau of Economic Analysis, U.S. Federal Reserve, U.S. Treasury

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21 Source: US Treasury, Congressional Budget Office “New Economy” Characteristics – Large Public Deficits and Debt Total U.S. Government Outlays as a % of GDP Outlays Average Outlays, 1950-2015E

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22 Source: US Treasury, Congressional Budget Office “New Economy” Characteristics – Large Public Deficits and Debt Total U.S. Government Outlays and Revenues as a % of GDP Outlays Average Outlays, 1950-2015E Revenues Average Revenues, 1950-2015E

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23 Since the 1950’s we have borrowed on average 2.3% of GDP In the first four years of the current administration we averaged 8.7% of GDP. In 2014, the deficit declined to 2.8% of GDP, the lowest since 2005 This is the only period post WWII when we have broken out of the range on both outlays and revenues Source: US Treasury, Congressional Budget Office “New Economy” Characteristics – Large Public Deficits and Debt Average net borrowing as a % of GDP 1950 – 2015E Average Net Borrowing as a % of GDP: 2.3% Outlays Average Outlays, 1950-2013 Revenues Average Revenues, 1950-2013

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24 Source: US Treasury, Congressional Budget Office, U.S. Office of Management and Budget “New Economy” Characteristics – Large Public Deficits and Debt Total U.S. Government Expenditures and Debt

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25 The Great Recession The Great Depression The Great Depression Source: U.S. Census, U.S. Federal Reserve Flow of Funds. Shading represents National Bureau of Economic Research Recessionary Periods “New Economy” Characteristics – Consumer De-Leveraging U.S. Household Debt as a Percent of GDP

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26 “New Economy” Characteristics - Employment Workforce participation is at a 35 year low – 62.7%. 2014 workforce much different in makeup than in 1978 7 to 9 million jobs below anticipated employment – reflected in consumer confidence and governmental revenues Source: U.S. Department of Labor; Bureau of Labor Statistics; FactSet, Associated Press Total U.S. Employment – Since 1949 Total U.S. Employment – Since 2000

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27 Source: U.S. Census Bureau, Bureau of Labor Statistics, National Association of Realtors, Standard & Poor’s, Financial Times, NY Times At the bottom of the housing market we saw $6 trillion worth of housing value destruction Housing prices are recovering but remain nationwide about 20% below the 2006 peak Median Household income flat for 25 years – symptom or the cure? Case-Shiller Home Price IndexReal U.S. Median Household Income “New Economy” Characteristics – Median Household Income and Housing Prices

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28 “In any moment of decision, the best thing you can do is the right thing…The worst thing you can do is nothing.” - Theodore Roosevelt

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29 Housing - FHA / Fannie Mae / Freddie Mac Healthcare – Medicare / Medicaid / ACA Education – Student Loans Regulatory climate – Dodd-Frank / Sarbanes-Oxley / EPA / OSHA / NLRB Interest rates – ZIRP The companies and organizations and governments who reacted rationally to the “New Normal” are already the winners - if the financial system is sound and the capitalist system is allowed to work (compete!) we will continue to recover and grow. How much of a role should the Federal Government play in the economy?

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30 “The nicest thing about not planning is that failure comes as a complete surprise, rather than being preceded by a period of worry and depression.” - Sir John Harvey-Jones

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31 1.Tax Code Reform Cost of complexity / Uncertainty over rates Highest marginal corporate tax rates Special interest provisions (housing /charities / municipal bonds) 2.Regulatory Overhaul / Exit of Private Enterprises The regulatory burden and cost to our economy is significant and growing Government involvement in private enterprises is anti-competitive If the future of our economy is competing globally, we have to compete globally. 3.Fiscal Responsibility Do we have the political will to address spending / which by definition includes entitlements and defense Are we positioned to continue to compete globally unless we continue to invest in education and technology and infrastructure – thereby spurring growth Planning to Grow / Planning to Compete

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32 “We can’t solve problems by using the same kind of thinking we used when we created them” - Albert Einstein

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34 Innovation is essential Compromise is paramount – my way or the highway is not an option, compromise must lead to competitive growth Compete and Grow

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35 Innovation is essential Compromise is paramount Establish clearly defined objectives - $20.7 trillion in the war on poverty / 15% poverty level for the last 50 years / have we created opportunity? Compete and Grow

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36 Innovation is essential Compromise is paramount Establish clearly defined objectives Get it right the first time – as time goes by our opportunities to be wrong diminish, as do our chances to lead the competitive growth of the world economy Compete and Grow

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37 Innovation is essential Compromise is paramount Establish clearly defined objectives Get it right the first time Focus on Growth and Competing – nothing else is relevant Compete and Grow

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38 “Men (or Women) make history, and not the other way around. In periods where there is no leadership, society stands still. Progress occurs when courageous, skillful leaders seize the opportunity to change things (for the better).” - Harry S Truman